The Bretton Woods Agreement was created in 1944 at a conference of all allied nations of World War II. It took place in Bretton Woods, New Hampshire. To prepare for the rebuilding of the international economic system while World War II was still raging, 730 delegates from the 44 Allied countries gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, USA, for the United Nations Monetary and Financial Conference, also known as the Bretton Woods Conference. Delegates deliberated from 1 to 22 July 1944 and signed the Bretton Woods Agreement on the last day. With the establishment of a system of rules, institutions, and procedures to regulate the international monetary system, these agreements created the IMF and the International Bank for Reconstruction and Development (IBRD), now part of the World Bank Group. The United States, which controlled two-thirds of the world`s gold, insisted that the Bretton Woods system be based on both gold and the U.S. dollar. Soviet representatives attended the conference, but later refused to ratify the final agreements, claiming that the institutions they created were “branches of Wall Street.”  These organizations began their work in 1945 after a sufficient number of countries had ratified the Convention. The support of money by the gold standard became a serious problem in the late 1960s.
In 1971, the problem was so serious that US President Richard Nixon announced that the ability to convert the dollar into gold would be “temporarily” suspended. This decision was inevitably the straw that broke the camel`s back for the system and the agreement it described. The IMF has tried to provide for occasional discontinuous exchange rate adjustments (changes in a member`s nominal value) through international agreements. Member States were allowed to adjust their exchange rates by 1%. This tended to restore the balance of their trade by increasing their exports and reducing their imports. This would only be allowed if there was a fundamental imbalance. A decrease in the value of a country`s currency was called a devaluation, while an increase in the value of the country`s currency was called a revaluation. A devastated Britain had little choice. Two world wars had destroyed the country`s main industries, which paid to import half of the country`s food and almost all its raw materials except coal.
The British had no choice but to ask for help. It is only in the United States on the 6th. In December 1945, the British Parliament ratifies the Bretton Woods Agreements (which then took place in December 1945).  The IMF was designed to lend to countries with balance of payments deficits. Short-term balance of payments difficulties would be overcome by IMF loans, which would facilitate exchange rate stability. This flexibility meant that a Member State did not have to trigger a depression to reduce its national income to such a low level that its imports would eventually fall into its capacity. In this way, countries should be spared the need to resort to conventional medicine to plunge into drastic unemployment in the face of chronic balance of payments deficits. Before World War II, European nations – especially Britain – often resorted to it. Before Bretton Woods, most countries followed the gold standard. This meant that each country guaranteed that it would buy back its currency for its gold value. According to Bretton Woods, each member agreed to buy back its currency for US dollars, not gold.
Despite the disintegration, the summit and the Bretton Woods agreement are responsible for a number of particularly important aspects in the financial world. First of all, there is the creation of the IMF and the World Bank. These two institutions are still of crucial importance to the global economy today. The Bretton Woods countries decided not to give the IMF the power of a global central bank. Instead, they agreed to contribute to a fixed pool of national currencies and gold that would be held by the IMF. Each member of the Bretton Woods system then had the right to borrow what it needed as part of its contributions. The IMF was also responsible for the implementation of the Bretton Woods agreement. At the end of the war, the Bretton Woods Conference was the culmination of about two and a half years of planning for post-war reconstruction by the Treasuries of the United States and the United Kingdom. U.S. officials, along with their British counterparts, looked at restoring what had been missing between the two world wars: a system of international payments that would allow nations to act without fear of a sudden currency devaluation or savage exchange rate fluctuations —diseases that had nearly paralyzed global capitalism during the Great Depression.
The agreement did not contain any provision relating to the creation of international reservations. He assumed that a new production of gold would suffice. In the case of structural imbalances, he expected national solutions, e.B. an adjustment in the value of the currency or an improvement in a country`s competitive position by other means. However, the IMF had few resources to promote such domestic solutions. Theoretically, the reserve currency would be the Bancor (a global monetary unit that was never implemented), proposed by John Maynard Keynes; However, the U.S. opposed it and their request was accepted, making it the “reserve currency” of the U.S. dollar. This meant that other countries pegged their currencies to the U.S. dollar and, once convertibility was restored, bought and sold U.S. dollars to keep market exchange rates at plus or minus 1% of parity. Thus, the U.S.
dollar has resumed the role that gold had played under the gold standard in the international financial system.  On a larger scale, however, the agreement united 44 countries from around the world and brought them together to resolve a growing global financial crisis. It has helped strengthen the global economy as a whole and maximized the profits of international trade. As chief economist of the US Treasury in 1942-44, Harry Dexter White drafted the US Plan for International Access to Liquidity, which rivaled Keynes` plan for the British Treasury. Overall, White`s program tended to favor incentives designed to create price stability in global economies, while Keynes wanted a system that would promote economic growth. The “collective agreement was a huge international undertaking”, the preparation of which took two years before the conference. These were numerous bilateral and multilateral meetings aimed at finding common ground on the policies that would constitute the Bretton Woods system. Post-war world capitalism suffered from a huge shortage of dollars. The U.S. ran huge trade surpluses, and U.S. reserves were huge and growing. This river had to be reversed.
Although all countries wanted to buy U.S. exports, the dollars had to leave the U.S. and become available for international use to do so. In other words, the US should reverse the imbalances in global prosperity by posting a trade deficit financed by an outflow of US reserves to other countries (a US budget deficit). The United States could suffer from a financial deficit by importing, building factories or donating to foreign countries. Remember that speculative investments were prevented by the Bretton Woods agreements. Importing from other countries was not attractive in the 1950s, as American technology was up to date at the time. Multinationals and U.S. global aid have flourished.  Under the agreement, countries promised that their central banks would maintain fixed exchange rates between their currency and the dollar. When the value of a country`s currency became too low against the dollar, the bank bought its currency on the foreign exchange markets.
The Bretton Woods system is a set of uniform rules and guidelines that provide the framework for the establishment of fixed international exchange rates. Essentially, the agreement provided for the newly created IMF to set the fixed exchange rate for currencies around the world. Each country represented took responsibility for maintaining the exchange rate, with incredibly tight margins above and below. Countries struggling to stay in the fixed exchange rate window could ask the IMF for an interest rate adjustment, which would then be the responsibility of all allied countries to comply. In 1944, due to the collective conventional wisdom of the time, representatives of all major Bretton Woods-allied nations collectively favored a regulated system of fixed exchange rates indirectly disciplined by a US dollar pegged to gold – a system based on a regulated market economy with strict controls on the value of currencies. Speculative international financial flows have been limited by their expulsion and limitation through central banks. This means that international investment flows have been poured into foreign direct investment (FDI), i.e. into the construction of factories abroad and not into the international manipulation of currencies or bond markets. .